Selangor Budget 2014: A fine, precarious balance.

November 20, 2013

Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim (right) speaks at the Selangor state assembly in Shah Alam today. - The Malaysian Insider pic by Najjua Zulkefli, November 20, 2013.Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim (right) speaks at the Selangor state assembly in Shah Alam today. – The Malaysian Insider pic by Najjua Zulkefli, November 20, 2013.Ulu Klang state assemblyman Saari Sungib pointed to a landslide in a hill side neighbourhood near Kemensah, to drive home his point that planning the state budget for Selangor was challenging.

Saari explained that it was thought that floods normally occurred in valleys or when water flowed downhill.

“But near Kemensah, bungalows on the hill were flooded with mud because when it rained, the drainage system was clogged,” said Saari, whose constituency has both low-middle income housing estates and upper class hill top bungalows.

Water seeped into the slopes surrounding the million-dollar homes, turning the earth into sludge and to eventually inundate the homes.

According to Saari, whether it is a housing estate or a commercial lot, new projects cannot be planned on a piecemeal basis without proper coordination between government agencies involved.

So when a local council and the drainage and irrigation department work together to come out with comprehensive development plans, the money they get should match these responsibilities.

The state can allocate RM100 million for flood mitigation, like it did for the 2013 budget. But Saari pointed out that equally important was who got the money, and how effectively it was spent.

Being an urban state, effectively monitoring how money is spent continues to be a major issue every time the Selangor government tables its budget.

Like in the mudslide example, it’s not enough to approve a project. The state must ensure the project does not harm surrounding structures, and every sen spent on support infrastructure must be a sen well spent.

Firm grip on the purse string

Fiscal discipline has been a hallowed ideal for the Pakatan Rakyat Selangor administration under Tan Sri Abdul Khalid Ibrahim.

It is how Pakatan has saved RM2.7 billion in reserves over six years. When it took over from Barisan Nasional in 2008, reserves were only RM400 million.

It is also how it consistently gets top marks in the Auditor General’s reports.

But after years of amassing a huge reserve, Pakatan state representatives want the administration to spend more on development.

The state backbenchers made this known in several meetings with Khalid while the administration was consulting everyone over what to include in the budget.

So when Khalid announced that RM430 million of the reserves would be spent on several initiatives such as building a third Klang bridge and more affordable homes, Pakatan assemblymen were supportive.

When money from the reserves are added to the development fund in the budget, the total amount for development becomes bigger than previous years.

In percentage terms, Selangor will spend 53.7% on operating expenditure and 46.3% on development expenditure.

In contrast, the BN federal government spends 83% of funds in the 2014 national budget on operating expenditure and 17% on development.

But even with a large sum for development, the catch phrase is budgetary performance: spend wisely and make sure money is well spent.

Save more, spend more

Bukit Antarabangsa assemblyman Azmin Ali referred to this when he lamented that the state government cut allocations to the State Drainage and Irrigation Department (DID).

Azmin said this was because by September, DID only spent 61% of the funds it received for 2013.

“But the state should not cut the allocation. If the state cuts the allocation it is like punishing the rakyat. Instead we should monitor their expenditure so that the money is well spent”, he added.

Any project that involves the RM430 million will have to be tabled in the state assembly before the money can be released.

“Now our reserves will be spent transparently and responsibly. Unlike during the BN era when there was a lot of money coming into the reserves but no one was told how it was spent,” said Azmin.

For Saari, effectively monitoring how much is spent on operating costs can result in more savings. With more savings, the reserves get bigger. And this means more money for affordable homes, entrepreneurship programmes for youth and women, and flood mitigation.

Also, perhaps a traffic masterplan as called for by Bukit Gasing assemblyman Rajiv Rishyakaran as a solution to the suburban traffic woes.

“Everything is planned separate from each other. Roads are separate from bus routes and we don’t plan according to growth projections in our towns. But if we continue to do this then we will be stuck in jams forever,” said Rajiv.

Unlike other big states with wide open spaces, any failure to keep the budget balanced can make a big difference in Selangor. Not just between what it earns and what it spends, but also between operations and development. – November 20, 2013.

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